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Tata Motors


Sunday, February 19, 2012

Tata Motors

LKP is bullish on Tata Motors and has recommended buy rating on the stock with a target of 318 in its February 16, 2012 research report.

Tata Motors is among the leading automobile manufacturers of India and is a subsidiary of Tata group. Through its subsidiaries it achieves - automotive retailing and service operations, high-precision tooling and plastic and electronic components for automotive and computer applications, machine tools and factory automation solutions, automotive vehicle components manufacturing and supply chain activities, construction equipment manufacturing, and engineering and automotive solutions. It operates under 2 segments - automotive operations and all remaining operations. Automotive operations include actions pertaining to developing, designing, manufacturing, assembling and selling vehicles. Remaining operations include – IT services factory automation solutions and machine tools.

According to an LKP report, Tata Motors consolidated sales was up by 43 percent y-o-y (year-on-year) in Q2 FY12, majorly led by strong sales performance on the JLR business. JLR volumes grew by 37 percent y-o-y to 86,322 units, while EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margins were at 18 percent, post adjusting for currency gain. Standalone sales were up by 16 percent y-o-y and 3 percent q-o-q (quarter-on-quarter), as volumes grew by 22 percent y-o-y, driven by strong performance at LCV segment, while PV segment continued to underperform over major part of the quarter. Consolidated margins came in at 15 percent while standalone margins sunk to 6.8 percent v/s 7.2 percent q-o-q, lowest in the recent past. Consolidated PAT (Profit After Tax) came in at 34.2mn, a growth of 42 percent y-o-y and 79 percent q-o-q.

Currently, Tata Motors is being traded at 273.90. Its 52 week high is 292.70 and 52 week low has been 137.55. It is currently being traded at an average volume of 16,383,706.

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